Deutsche Telekom cuts profit, outlooks for the year

LONDON (MarketWatch) -- Deutsche Telekom AG, Europe's largest telecom company, on Tuesday cut its annual forecasts for adjusted profit and free cash flow, citing more intense competition in the U.K. and the U.S. and the impact of the economic slowdown.

DT said it expects adjusted earnings before interest, taxes, depreciation and amortization to be 2% to 4% lower than the 19.5 billion euros ($25.5 billion) it reported in 2008. It was the second cut to its outlook since the start of the year.

The group anticipates free cash flow of about 6.4 billion euros compared with a previous target of 7 billion euros.
Yiru Zhong, research analyst in the U.K. telecoms practice of Frost & Sullivan, said she wasn't surprised by the lowered forecast considering the economy has taken a turn for the worst in Western Europe over the past few months. She also noted that many retailers have already cautioned against lower results this year.

Shares of Deutsche Telekom dropped 8.2% in Frankfurt afternoon trading. They are down 13% over the past three months.